Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Equity crowdfunding provider welcomes financial market regs

Thursday 27 February

For Immediate Release

NZ equity crowdfunding provider welcomes new financial market regulations

The Directors of soon-to-launch equity crowdfunding provider Snowball Effect have welcomed Cabinet’s approved regulations for crowdfunding and peer-to-peer lending as part of the Government’s financial market overhaul.

In particular they have applauded the announcement that there will be no investor caps for equity crowdfunding, other than the previously announced $2 million cap that a company can raise through crowdfunding each year.

“We have held the strong view for a long time that caps are a blunt instrument for investor protection,” says Snowball Director, Simeon Burnett.

“We opposed the introduction of investor caps, because we believed that investors would easily be able to circumvent such controls by investing in foreign crowdfunding platforms, or investing through entities which do not reveal the ultimate owner. We also believe that individuals should be allowed to make their own decisions about their money.

“Clearly however, if equity crowdfunding is going to develop sustainably in New Zealand, there needs to be reasonable safeguards for investors so they are best placed to understand the risks and characteristics of the investments they are making.

“Investor protection in the regulations comes in many forms, including the requirement for share issuers to seek funds only through licensed providers, the requirement for the licensed providers to conduct background checks on issuers and directors, and the requirement to make investors aware of the inherent risks associated with investment via equity crowdfunding.”

Mr Burnett says extensive market research has shown that everyday investors and New Zealand and SMEs are struggling to connect, but want to do so.

“Our vision is a New Zealand economy fuelled by emerging businesses backed by everyday Kiwi investors,” he says.

“The country’s economic engine room is small to medium-sized enterprises (SME’s) and there are thousands of them with big vision who can’t take the next step on the growth ladder because the banks won’t lend, and other sources of capital don’t fit or are cost prohibitive. There are also thousands of New Zealanders with innovative ideas that can’t get them off the ground because raising start-up capital is typically limited to loans from friends and family.

“On the other side, tens of thousands of proud Kiwi investors or would-be investors would love to take a stake in one of the most dynamic sectors in the economy, but are currently unable to do so, particularly if they only have a small amount of money that they're willing to invest.”

Burnett says Snowball Effect will open the market up by connecting the two groups.

Snowball Effect is scheduled to launch in April once it is licensed by the FMA under the regulations.

ENDS

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Scoop Business: RBNZ Keeps OCR At 3.5%, Signals Slower Pace Of Future Hikes

Reserve Bank governor Graeme Wheeler kept the official cash rate at 3.5 percent and signalled he won’t be as aggressive with future rate hikes as previously thought as inflation remains tamer than expected. The kiwi dollar fell to a seven-month low. More>>

ALSO:

Weather: Dry Spells Take Hold In South Island

Many areas in the South Island are tracking towards record dry spells as relatively warm, dry weather that began in mid-August continues... for some South Island places, the current period of fine weather is quite rare. More>>

ALSO:

Scoop Business: Productivity Commission To Look At Housing Land Supply

The Productivity Commission is to expand on its housing affordability report with an investigation into improving land supply and development capacity, particularly in areas with strong population growth. More>>

ALSO:

Forestry: Man Charged After 2013 Death

Levin Police have arrested and charged a man with manslaughter in relation to the death of Lincoln Kidd who was killed during a tree felling operation on 19 December 2013. More>>

ALSO:

Smells Like Justice: Dairy Company Fined Over Odour

Dairy company fined over odour Dairy supply company Open Country Dairy Limited has been convicted and fined more than $35,000 for discharging objectionable odour from its Waharoa factory at the time of last year’s ”spring flush” when milk supply was high. More>>

Scoop Business: Dairy Product Prices Decline To Lowest Since July 2012

Dairy product prices dropped to the lowest level since July 2012 in the latest GlobalDairyTrade auction, led by a slump in rennet casein and butter milk powder. More>>

ALSO:

SOE Results: TVNZ Lifts Annual Profit 25% On Flat Ad Revenue, Quits Igloo

Television New Zealand, the state-owned broadcaster, lifted annual profit 25 percent, ahead of forecast and despite a dip in advertising revenue, while quitting its stake in the pay-TV Igloo joint venture with Sky Network Television. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news